Suspended Vice-Admiral Mark Norman leaves court following a hearing on access to documents in Ottawa, Friday, Nov. 23, 2018. New court documents show public servants discussing the risk to taxpayers as successive federal governments have turned to sole-source contracts to buy desperately needed equipment for the Canadian Forces and others. (Adrian Wyld/The Canadian Press)

Suspended Vice-Admiral Mark Norman leaves court following a hearing on access to documents in Ottawa, Friday, Nov. 23, 2018. New court documents show public servants discussing the risk to taxpayers as successive federal governments have turned to sole-source contracts to buy desperately needed equipment for the Canadian Forces and others. (Adrian Wyld/The Canadian Press)

Sole-sourced contracts can be ‘raw deal’, top officials said in navy ship case

Prime Minister Justin Trudeau’s government has chosen to sign several sole-source contracts to bolster the coast guard’s aging icebreaking fleet and the country’s fighter-jet force

New court documents show public servants discussing the risk to taxpayers as successive federal governments have turned to sole-source contracts to buy desperately needed equipment for the Canadian Forces and others.

The documents were filed on behalf of suspended Vice-Admiral Mark Norman, who is charged with breach of trust in connection with one such contract. They land amid frustrations with Canada’s military procurement system — including because of political mismanagement — that have led to the need for quick fixes.

Prime Minister Justin Trudeau’s government has chosen to sign several sole-source contracts to bolster the coast guard’s aging icebreaking fleet and the country’s fighter-jet force, buying time to find permanent replacements.

READ MORE: Out with the old: Trump to kill old NAFTA to push Congress to approve USMCA

Sole-sourcing does make sense in many cases, said defence analyst David Perry of the Canadian Global Affairs Institute, particularly where there is an emergency or it’s clear that only one company can meet the government’s needs.

“But if you’re sole-sourcing to fill a capability gap, that’s the result of mismanaging a procurement to the point where you are out of options and have no alternative,” Perry said. “That’s not really a good reason to be sole-sourcing.”

The Tories under Stephen Harper once intended to buy a fleet of F-35 fighter jets on an untendered contract, but aborted that plan in 2012 once the full price became known.

Then the Trudeau government planned to spend about $6 billion on 18 sole-sourced “interim” Super Hornets from Boeing because it said Canada needed more fighter jets to support its aging CF-18s until replacements could be purchased through a competition.

The Super Hornets deal eventually fell apart because of a trade dispute with Boeing. So the government is buying 25 second-hand Australian fighter jets, also without a competition. Canada isn’t expected to get new fighter jets until at least 2025.

The Liberals also recently bought three second-hand icebreakers from Quebec-based Davie Shipbuilding for the coast guard, whose existing fleet is on average 35 years old — with no immediate plan to replace it on the horizon.

Suspended as the military’s second-in-command in January 2017, Norman was charged in March 2018 with one count of breach of trust for allegedly leaking cabinet secrets to Davie over a different contract. He has denied any wrongdoing and vowed to fight the charge.

The case against Norman centres on a sole-sourced deal negotiated between Davie and the previous Conservative government in 2015, in which the Quebec shipyard proposed converting a civilian cargo ship into a temporary support vessel for the navy.

The $700-million contract with Davie was not finalized before that year’s federal election. Although the newly elected Liberals at first wanted to delay it for a closer review, they signed off on the deal a short time later.

Before Liberal ministers agreed to buy the converted ship, bureaucrats from the Privy Council Office, the government’s top department, wrote a secret briefing note in November 2015 that discussed the problems with not holding a competition.

“The risk inherent with a sole-source contract is that much of the leverage in the contract negotiation resides with the company,” the bureaucrats wrote, even as they noted that the Conservatives had exempted the deal from the usual oversight for such projects.

Despite these concerns, the officials recommended the government approve the deal. Partly because they had assessed that “risk mitigation measures” were in place, but mostly because the navy urgently needed a support ship for faraway operations.

The court documents, none of which have been filed as exhibits or tested in court, include RCMP interviews with civil servants that suggest politicians’ desire for votes in Quebec also played a role in the decisions about the ship. But the navy’s need for the vessel was real.

The navy at the time had just retired its 50-year-old support ships and while replacements are being built in Vancouver through the government’s national shipbuilding plan, numerous delays and problems mean they won’t be ready until the 2020s.

The navy had originally expected to get new support ships in 2012.

The briefing note said a competition could have been held to find another, perhaps cheaper, solution, but ”a competitive process would take longer to deliver a solution — likely 10-14 months for a contract award, and then more time for the service to be ready.”

RCMP interviews with several senior civil servants raise similar concerns about awarding a contract to Davie without a competition while also alluding to the sense of urgency in getting new support ships.

The Defence Department’s head of procurement, Patrick Finn, told the Mounties that other companies were clamouring to compete to supply a temporary support ship in late 2014, and that “the information existed to say that this could be done competitively.”

But Finn noted that Davie had already found a ship that it could convert for the navy, which “at that point had no replenishment ships.”

Melissa Burke, an analyst with the Privy Council Office who attended various cabinet meetings about Davie’s proposal in 2015, told the RCMP that federal procurement officials were unhappy because “they felt the taxpayers were getting a raw deal.”

Lee Berthiaume, The Canadian Press


Like us on Facebook and follow us on Twitter.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

rcmp
South Surrey neighbours’ calls to police lead to break-and-enter arrest

‘Prime example’ of RCMP and public working together, constable says

Linda Annis, Aug. 12, 2020. (Photo: Malin Jordan)
Annis wants independent auditor general for Surrey

‘Surrey taxpayers deserve the best possible oversight of the tax dollars they send to city hall,’ Surrey councillor says

SkyTrain’s end of the line, for now, in Whalley. (File photo)
Provincial budget watchers lament no mention of Surrey SkyTrain expansion

But $1.66 billion is earmarked for a second hospital for Surrey, in Cloverdale

Artist Jim Adams pictured in 2017 in the “cockpit” of his home studio in White Rock. (File photo: Tom Zillich)
‘Vancouver Special’ show a home for art by one Surrey Civic Treasure starting May 22

White Rock’s Jim Adams welcomes the ‘major exposure’ at Vancouver Art Gallery

A large crowd protested against COVID-19 measures at Sunset Beach in Vancouver on Tuesday, April 20, 2021. (Snapchat)
VIDEO: Large, police-patrolled crowds gather at Vancouver beach for COVID protests

Vancouver police said they patrolled the area and monitored all gatherings

FILE – The Instagram app is shown on an iPhone in Toronto on Monday, March 19, 2018. THE CANADIAN PRESS/Graeme Roy
Judge acquits B.C. teen boy ‘set up’ on sex assault charge based on Instagram messages

The girl and her friends did not have ‘good intentions’ towards accused

Kai Palkeinen recently helped a car stuck on the riverbed near the Big Eddy Bridge. While the car could not be saved, some of the driver’s belongings were. It’s common for vehicles to get stuck in the area due to significantly changing river levels from Revelstoke Dam. (Photo by Kai Palkeinen)
“I just sank a car’: Revelstoke resident tries to save vehicle from the Columbia River

Although it’s not permitted, the riverbed near the city is popular for off roading

Playland at the PNE is set to reopen this May, with COVID-19 health and safety measures approved by the province. (Website/Playland)
VIDEO: Playland at PNE scheduled to reopen this May to masked customers

British Columbians are discouraged from travelling outside of their local health authority to visit the theme park

Cannabis bought in British Columbia (Ashley Wadhwani/Black Press Media)
Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

Meng Wanzhou, chief financial officer of Huawei, walks down the street with an acquaintance after leaving B.C. Supreme Court during a lunch break at her extradition hearing, in Vancouver, B.C., Thursday, April 1, 2021. A judge is scheduled to release her decision today on a request to delay the final leg of hearings in Meng Wanzhou’s extradition case. THE CANADIAN PRESS/Rich Lam
B.C. judge grants Meng Wanzhou’s request to delay extradition hearings

Lawyers for Canada’s attorney general had argued there is no justification to delay proceedings in the case

B.C. Premier John Horgan announces travel restrictions between the province’s regional health authorities at the legislature, April 19, 2021. (B.C. government photo)
B.C. sees 862 more COVID-19 cases Wednesday, seven deaths

Recreational travel restrictions set to begin Friday

B.C. Finance Minister Selina Robinson is photographed following her budget speech in the legislative assembly at the provincial legislature in Victoria, Tuesday, April 20, 2021. THE CANADIAN PRESS/Chad Hipolito
B.C. budget lacks innovative drive, vision during uncertain times, say experts

Finance Minister Selina Robinson’s budget sets out to spend $8.7 billion over three years on infrastructure

Using panels kept cold by water circulating within them, B.C. researchers compared thermal comfort in 60 of the world’s most populous cities, including Toronto. (Lea Ruefenacht)
B.C. researchers use air conditioning to combat spread of COVID particles

Dr. Adam Rysanek and his team have proven a new worthwhile system – a mixture of cooling panels and natural ventilation

Most Read